Due to your experience in signing up for car insurance plans, you probably know many of the factors that go into determining your rates. However, you may not know that traffic tickets also play a large role in determining rates. The more tickets you get, the higher your insurance rates go up. Therefore, you should utilize this report so you know exactly how the tickets are factored into your rates. You'll even learn how to lower your insurance rates!

How Rates Are Calculated

The methods an insurance company uses to determine your rates are usually very complex and confusing, and the calculations will be different with each company. Various states require insurance agencies to set a base rate (the average rate of car insurance in the respective state prior to any discounts or adjustments, including processing fees), but many times this information isn't given to the public, and it doesn't account for differences in driving records from person to person.

Alternatively, some states require that insurance companies make their calculations clear to the customer, but this information doesn't come in layman's terms and can be very complex for the average person to comprehend. However, you will find that many companies are consistent in their rate increases for a ticket or accident.

Analyzing Your Driving History

Whenever you are guilty of a speeding ticket, running a red light, or any moving violation, you will see its impact on your driving record. Usually, you won't have to report the ticket, but that doesn't mean they won't find out about it. The insurance companies check your driving record at regular intervals and assign adjustments and rate increases if needed. Most insurance agencies will also check your driving history before they sign a contract with you, and then they will check in every year to look for driving offenses.

How Moving Violations Affect Your Rates

Whatever violation you are guilty of, there will be a difference in the handling of it by each individual insurance company. Information taken into consideration include things like whether or not this is your first offense, if you've gotten numerous tickets in a single incident, or if you are a repeat offender. In a study done by Insurance.com, a look at 500,000 insurance quotes showed that just one ticket can increase a premium by up to 22%. The following is how much each offense may increase your premiums:

  • Reckless Driving: 22%
  • First DUI: 19%
  • Driving Without a License: 18%
  • Careless Driving: 16%
  • Speeding, 30 mph over: 15%
  • Failure to Stop: 15%
  • Improper Turn: 14%
  • Improper Passing: 14%
  • Following too Close: 13%
  • Speeding, 15 to 29 mph over: 12%
  • Speeding, 1 to 14 mph over: 11%
  • Failure to Yield: 9%
  • No Insurance: 6%
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In the event you get a violation, the actual effects will be different for each person and each insurance agency. Insure.com states that high-level offenses and accidents that are your fault may be grounds for an even larger increase than the ones stated above. Many times, the increase for a serious offense will range from 20% to 40%. The usual method is 20% for a multi-car policy, and 40% for a one-car policy. These are the rules set by the Insurance Services Office (ISO).

How to Lower Your Rates

To make things even more confusing, your insurance agency may choose to increase your rates higher or lower than the aforementioned percentages set by the ISO. Therefore, if you think your insurer is bloating your rates an excessive amount, it'd be a great time to start shopping around for a new provider. If you do end up getting a better deal, you can try to haggle with your current insurance agency to see if they will come down to meet it or offer an even lower rate. If they decline, you may be better off going with the new guys.

On the other hand, if you can't find a better deal, you can lower your rates by upping your deductibles. Insurance.com states you may be able to lower rates by up to 30% by raising your deductible from $250 to $500. In addition, if your vehicle is very old or not worth much, you might want to consider dropping all coverages but the essentials for further savings.

Another option at your disposal for lowering your car insurance premium is to enroll in a defensive driving course. Select states, such as Delaware, Texas, New York, and New Jersey actually require insurance providers to offer a chance to lower a person's premiums for successful completion of a defensive driving course.

Be Careful!

The #1 way to keep your insurance rates down is to keep a clean driving record, which starts with becoming more aware on the roads. It's helpful for many drivers to put a little reminder on their dashboards so you are reminded of good driving habits whenever you look at the odometer. That being said, we are human, and humans make mistakes, so just know that if you do happen to get a traffic ticket, you have options to significantly reduce your penalty.


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